I understand that working with the government comes with its ups and downs. Still, there should at least be a semblance of rules and order for that government, right?
I suppose not. Here are a few of the recent issues coming out of the VA’s Center for Verification and Evaluation, which evaluates business eligibility for the Veterans First Contracting Program. That program is designed specifically to give veteran business owners set-aside opportunities through the VA.
As I blogged about several weeks ago, some businesses have experienced removal of their NAICS codes from their VetBiz profile, which potentially jeopardized their eligibility for contracts (i.e., if they submitted a proposal where it was required that the NAICS code was listed, and they had no idea it had been removed due to a technical glitch, they might be out of the running). After that blog posted, I received a call from Chanel Bankston-Carter, who is the Director of Strategic Outreach and Communications of the VA OSDBU. I asked her whether the CVE was planning on sending out an email blast to alert business owners to the issue, and she said it was, as well as planning to post to the VA’s homepage. That was on August 10, and three weeks later it still hasn’t happened.
Also, the CVE has recently decided to (secretly and without notification to veteran owners in any way whatsoever except for a denial letter) revise its own definition of “full-time.” I learned this very recently, and only through a conversation with a CVE examiner. I have been assisting with VA VetBiz applications for six years now (almost since the inception of the program), and this might be the biggest shock I’ve had yet.
Here’s the gist: as part of the eligibility requirements for the Veterans First Contracting Program (38 CFR Part 74), veteran business owners must devote “full-time to the business.” There is nothing in the regulation that distinguishes between startups and established businesses. However, apparently examiners are being told that owners of start-ups must show 15 hours of work per week, and owners of established businesses must show 40. There is no written guidance provided for this, nor is it supported in the VA’s regulations. Nor is it on the CVE’s website, or in the Verification Assistance Briefs. Etc., etc. (Here is the current Verification Assistance Brief on full-time control posted to the CVE’s website. This does not provide for a specific number of hours to be devoted by veteran owners).
Has anyone heard the term “arbitrary and capricious?” An agency is not permitted to interpret its regulations in a way that is arbitrary and capricious, meaning that it has no reasonable basis. Here, there is no basis for the VA’s random (and unwritten) determination of the number of hours that qualify as veteran owner “full-time” involvement. If a company undergoing the verification process were to sue the VA for denying its application on this basis, I daresay they’d win.
Why does the CVE do this to itself? If it wants to develop a more robust definition of “full-time” and hold veteran owners to it in order to ensure the spirit and purpose of the program is protected, fine. But for there to be no written notice or justification to it – that’s not acceptable on a number of levels.
I hope I’m wrong on this. I hope I have been told incorrect information, and someone at the CVE can provide clarification or correction. (I am aware of several higher-ups involved with the CVE who read this blog). I’m asking them to do this, and if so, I will happily incorporate any feedback they offer. If it is true, however, veteran owners need to know about this requirement before they attempt to navigate the VetBiz maze and find that they are subject to literally invisible rules.
These developments remind me of a very old Saturday Night Live skit starring Lily Tomlin. She’s a phone operator, gleefully playing with the switchboard (“Uh, oh! We just lost Peoria. Oh, well.”) and repeating the mantra, “We don’t care! We don’t have to. We’re the phone company.”
The CVE appears to have the same mentality. It can do whatever it wants because it is the sole means to verify veteran business owners as eligible for set-aside work from the VA. Lately, it’s become much more difficult, and for reasons that aren’t justified. And that new website – goodness.
I have always seen the VA’s mission of helping veteran business owners as one of the most important in our government, and veteran owners are struggling because of problems that don’t have to be there. But what are we to do?
It was funny when Lily Tomlin said it, but not when the CVE does. Veteran businesses are on the line here.
*Did you find this article informative? If so, sign up for Sarah Schauerte’s legal blog on veteran business issues at: https://legalmeetspractical.com.
